Tencent Music Stock Dips After Earnings Miss, But Retail’s Bullish

Tencent Music Group ($TME) ADR shares were down 8.57% on Tuesday morning (11:51 a.m. ET) after the company missed estimates on third-quarter earnings, but retail sentiment remained strong.

Tencent‘s earnings per share (EPS) came in at $0.14, missing estimates of $0.16 as quoted by Wall Street analysts.

Revenues of $1.0 billion were up 6.8% year-over-year (YoY), driven by growth in online music services, while net profit came in at US$244 million, jumping 35.3% YoY.

Retail sentiment on the online music company has turned ‘extremely bullish’ (93/100) compared to ‘neutral’ (47/100) a week ago. While message volumes have climbed into the ‘extremely high’ zone from ‘normal’.

Tencent provides music streaming, online karaoke, and live streaming services, and is behind such brands as “QQ Music,” “Kuwo Music,” and “WeSing.”

"Our commitment to high-quality growth is reflected in another solid quarterly performance,” Cussion Pang, executive chairman of TME, said in a statement. “The steady expansion of our music subscribers and diversified music services continue to drive overall growth and profitability. We are encouraged by the growing synergies between our platform and well-established content ecosystem, which have become a vital force in empowering us to seize new opportunities for long-term, sustainable growth."

Earlier this month, Barclays analyst Jiong Shao started to cover Tencent, keeping an ‘Overweight’ rating and a $16 price target, The Fly reported.

Tencent Music’s stock is up 21.31% year-to-date.

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